Code Banken (Banking Code)

At the end of 2014, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) presented a package entitled ‘Future-oriented banking’, in which banks jointly set out their intention to pursue service-oriented and sustainable banking activities.

This package consists of three parts:

A social charter which describes the role of banks in society and the shared values in the sector.

A new Banking Code that guarantees good governance within each individual bank and which establishes principles governing sound and ethical operation as well as principles regarding an effective risk policy and the set-up of the executive board and the supervisory board.

A code of conduct for individual employees (what they stand for and what they are accountable for).

The Banking Code applies to all activities performed in or directed towards the Netherlands by banks established in the Netherlands and licensed by the Nederlandsche Bank pursuant to Section 2:11 of the Financial Supervision Act. In the event of overlap or contradiction with international legislation or the policy of regulators, this prevails over self-regulation such as the Banking Code. The new Banking Code is designed – along with the Social Charter and the introduction of the bankers’ oath, rules of conduct, and disciplinary scheme – to make a major contribution to public trust in banks and their role in the community. Consequently, the principles in the Code emphasise the importance of sound and ethical operation by banks and set this out in the principles for the executive board and supervisory board, proper risk management, thorough audit processes, and a sound, balanced, and sustainable remuneration policy. Compliance with the Banking Code is monitored by an independent Banking Code Monitoring Committee established on 14 October 2014. The main task of the Banking Code Monitoring Committee is to monitor compliance with the Banking Code on the basis of the ‘comply or explain’ principle. In doing so, the committee can flag any ambiguities and imbalances in the Banking Code, and make recommendations about possible adjustments. The Monitoring Committee will in any case issue a publicly available annual report. The revised Banking Code came into effect on 1 January 2015. The Banking Code does not stand alone but is part of the full set of national and international regulations, case law, and self-regulation. When applying its principles, a bank will take this national and international context, the social environment in which it operates, and the specific characteristics of the individual bank and group, if it is part of one, into account.